Correlation Between Altri SGPS and EDP Energias
Can any of the company-specific risk be diversified away by investing in both Altri SGPS and EDP Energias at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Altri SGPS and EDP Energias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altri SGPS SA and EDP Energias, you can compare the effects of market volatilities on Altri SGPS and EDP Energias and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Altri SGPS with a short position of EDP Energias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altri SGPS and EDP Energias.
Diversification Opportunities for Altri SGPS and EDP Energias
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Altri and EDP is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Altri SGPS SA and EDP Energias in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDP Energias and Altri SGPS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Altri SGPS SA are associated (or correlated) with EDP Energias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDP Energias has no effect on the direction of Altri SGPS i.e., Altri SGPS and EDP Energias go up and down completely randomly.
Pair Corralation between Altri SGPS and EDP Energias
Assuming the 90 days trading horizon Altri SGPS SA is expected to generate 0.6 times more return on investment than EDP Energias. However, Altri SGPS SA is 1.66 times less risky than EDP Energias. It trades about -0.04 of its potential returns per unit of risk. EDP Energias is currently generating about -0.16 per unit of risk. If you would invest 507.00 in Altri SGPS SA on August 29, 2024 and sell it today you would lose (7.00) from holding Altri SGPS SA or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altri SGPS SA vs. EDP Energias
Performance |
| Timeline |
| Altri SGPS SA |
| EDP Energias |
Altri SGPS and EDP Energias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altri SGPS and EDP Energias
The main advantage of trading using opposite Altri SGPS and EDP Energias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altri SGPS position performs unexpectedly, EDP Energias can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in EDP Energias will offset losses from the drop in EDP Energias' long position.| Altri SGPS vs. The Navigator | Altri SGPS vs. Sonae SGPS SA | Altri SGPS vs. NOS SGPS SA | Altri SGPS vs. Galp Energia SGPS |
| EDP Energias vs. Galp Energia SGPS | EDP Energias vs. Sonae SGPS SA | EDP Energias vs. Banco Comercial Portugues |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |